QUESTION: My husband and I are buying a house that we know has been in the sellers' family for decades. We are tempted to skip the title search and not bother with buying title insurance. We are very confident that the owners really own it. They are even willing to finance the sale for us. Does that seem OK?
ANSWER: Seller financing is probably fine, although you would want to obtain the advice of an attorney to be sure the financing agreement is properly structured.
Skipping the title search and not buying title insurance is another matter. I understand that you believe that the current owners have clear title and that there would be a significant savings by not purchasing the insurance but it isn't worth the risk. Title problems are varied and, unfortunately, numerous.
Title searches for homes owned by a single man or woman sometimes reveals that there are actually two names on the ownership record. The house may have been purchased when the person now selling had been married, for example. A name may have been added to the title for estate planning purposes and that addition forgotten or not understood by the seller.
Sometimes, especially in Florida, homes are sold by the children of a recently deceased parent. A title search might reveal that the property is, in fact, in the name of the parent but the parent has died without a will to indicate what should be done with the property.
Parents of an adult child may have loaned money to improve the property and, being prudent and businesslike, filed a second mortgage on the property at the time of the loan. The loan may have been paid off years before but the mortgage may still appear.
The current owners may have been in dispute in the distant past with a contractor who completed some repairs on the house. The contractor may have protected himself by filing a lien on the house. The lien may still be in place regardless of whether the bill was paid.
Title insurance is well worth the cost. If in doubt about the implications for you, please consult a mortgage attorney.
Attorney Sylvia Heldreth is a certified specialist in real estate law. Her office is located at 1215 Miramar St., in Cape Coral.
This article is not intended as specific legal advice to anyone and is based upon facts that change from time to time. Individuals should seek legal counsel before acting upon any matter involving the law.